Out of the six SPACs Chamath Palihapitiya has launched so far, there are two that have yet to identify their acquisition targets. Social Capital Hedosophia Holdings IV (NYSE:IPOD) and Social Capital Hedosophia Holdings VI (NYSE:IPOF) are blank-check companies with roughly $400 million and $1 billion, respectively, to invest in taking target companies public, and both stocks have fallen considerably in recent weeks.
In this Fool Live video clip, recorded on March 15, Fool.com contributors Matt Frankel, CFP, Brian Withers, and Dan Caplinger discuss whether these two blank-check companies might be worth a look now.
Matt Frankel: Chamath has two pre-deal SPACs, meaning SPACs that are still looking for their acquisition target in the market. If you want to get in on the ground floor of his next big idea, their ticker symbols are I-P-O-D and I-P-O-F. This is Social Capital Hedosophia Holdings four and six. We’ll discuss what happened with five in just a minute. But these are his two existing blank-check companies. IPOD raised a little over $400 million, IPOF raised a little over $1 billion. Other than the size, these are just two of Chamath’s blank check companies. Do either of you own these? Have any opinion on what they might acquire? I’ll weigh in if neither of you do.
Dan Caplinger: I will say, I did hear a little bit when Richard Branson was talking about bringing Virgin Orbit public, that some folks speculated well, Chamath worked with Virgin on the Virgin Galactic. Maybe IPOD or IPOF would end up being the vehicle for that especially, once VG Acquisition got used up for 23andMe. These SPACs, they ran up, they were up around $15, $16 a share. When we had sort of the SPAC high-growth pullback, they came really crashing back down in another around $11 or $12, I think-$11 or $12 seems like a reasonable deal to me, $15 or $16 without a target announced seemed high to me. It’ll be interesting to see what happens with these guys especially, with Chamath doing all these PIPE investments now instead doing stuff for his SPACs, it’s interesting to see.
Brian Withers: I’m going to use a — I’m going to tell you about what Forrest Gump thinks about SPACs. He says that SPACs are like a box of chocolates, you’ll never know what you get. That’s my take on it. As tight as with my portfolio is with 21 stocks, I want to know what I’m buying before I put it in.
Frankel: I would push back on that. SPACs are like a box of chocolates, but you get to pick who’s making the chocolate.
Withers: There you go.
Frankel: That’s a lot of what people are buying here. Another one that I heard today is a candidate is Plaid after their merger with Visa fell apart. Because we know Chamath likes the fintech space. If he can get it at the right price, I could see them going after that one.
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